If the Minimum Points of All the Possible Short-Run Average

question 206

Multiple Choice

If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:

• A) the firm should try to produce less output.
• B) total fixed costs are constant along the LRAC curve.
• C) there are economies of scale.
• D) the firm is probably having significant management problems.
• E) when output is doubled, total costs are doubled.

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Definitions:

U.S. Interest Rates

The rate at which borrowers are charged for borrowing money or the rate earned by investors when lending money, set by central and commercial banks in the United States.

Depository Institutions Deregulation and Monetary Control Act

A 1980 United States federal law that deregulated banks and other depository institutions to help improve the Federal Reserve's control over monetary policy.

Fed's Legal Reserve Requirements

The minimum reserves each bank must hold to customer deposits and notes, as mandated by the Federal Reserve.

Reserve Requirement

The amount of funds that a bank must hold in reserve against deposits made by its customers, a regulatory measure to ensure banks can meet withdrawal demands.